How bad is structural UE?

[william the wie]

In looking at revised 3rd quarter GDP growth of 3.6% vs. UE and Labor Force participation rate it looks to me like structural UE is in the double digits for the US. Some places like the EU and Far East look far worse. Take China, 60% of GDP is normally spent on construction of empty buildings or other useless structures and 20% on maintaining employment at State Owned Enterprises. France may make China look good.

Since the US has the least regulated labor market it gets the most foreign investment. With a change to a one for one tax credit for taxes paid overseas the US could add trillions more to total US investment but would that reduce unemployment appreciably? There are lots of other ways to increase real GDP growth but will that translate into increased employment?

Just wondering what other think about that.

 

[oldfart]

In looking at revised 3rd quarter GDP growth of 3.6% vs. UE and Labor Force participation rate it looks to me like structural UE is in the double digits for the US. Some places like the EU and Far East look far worse. Take China, 60% of GDP is normally spent on construction of empty buildings or other useless structures and 20% on maintaining employment at State Owned Enterprises. France may make China look good.

Since the US has the least regulated labor market it gets the most foreign investment. With a change to a one for one tax credit for taxes paid overseas the US could add trillions more to total US investment but would that reduce unemployment appreciably? There are lots of other ways to increase real GDP growth but will that translate into increased employment?

Just wondering what other think about that.

There is a huge glitch in the "structural unemployment" numbers. The algorithm used essentially adjusts structural unemployment upward in times of high unemployment which persists more than a few quarters automatically regardless of labor market conditions. This is moving the goal posts. The argument is exactly backward. Rather than take a definition of structural unemployment and then going out to count how many of them there are, we compute a number and then assume a narrative of why that number is what it is.

There is such a thing as structural unemployment, but the numbers used bear no relationship to that concept.

 

[pinqy]

In looking at revised 3rd quarter GDP growth of 3.6% vs. UE and Labor Force participation rate it looks to me like structural UE is in the double digits for the US. Some places like the EU and Far East look far worse. Take China, 60% of GDP is normally spent on construction of empty buildings or other useless structures and 20% on maintaining employment at State Owned Enterprises. France may make China look good.

Since the US has the least regulated labor market it gets the most foreign investment. With a change to a one for one tax credit for taxes paid overseas the US could add trillions more to total US investment but would that reduce unemployment appreciably? There are lots of other ways to increase real GDP growth but will that translate into increased employment?

Just wondering what other think about that.

ummm what definition of structural employment are you using? The standard definition is unemployment resulting from a mismatch of skills demanded and skill available. But that's not what you're talking about, so I'm not sure of your definition.

 

[expat_panama]

...what definition of structural employment are you using?...

That was my problem w/ this thread too. Like, if this is something made up, brand new, and personal then fine --define everything in terms familiar to the group. If this is a continuing debate topic in the econ biz then let's see some links.

 

[SteadyMercury]

see.... food insecurity

 

[william the wie]

I am asking a question:

If GDP growth is 50% greater than expected, and up on revision it was in the third quarter going from 2.4% to 3.6%, then an explanation of why labor force/labor force fraction is still shrinking is needed. I haven't seen any that is not dismissed as CT.

If this is the case then there is an explanatory problem in generally accepted economic theory. I think the problem with explaining employment numbers is a belief in general equilibrium. Since I can reasonably expect the posters on this thread to be at least somewhat acquainted with:

Mandelbrot's use of Fractals to refute the existence of equilibrium in "The (Mis)behavior pf Markets".

The citations in Lorenz's "The Essence of Chaos" that implies (he was a meteorologist with a strong math background like Kenneth Arrow but without the economics degree) that Keynes's multiple equilibria was a butterfly strange attractor. (One two dimensional and two three dimensional attractors.)

And the works of Minsky and Arthur on complexity and the non-extistence of equilibrium at the margin.

I think I can ask my follow up question. Since politicians tend to avoid math other than polling statistics and data mining they are not going to use non-equilibrium economics I'm trying to figure out what advice they are going to accept as to how to cure "structural" unemployment?

Is that more clear? Sorry, for any confusion I may have caused.